The Boost VC Podcast - Ep. 67: Pioneering Blockchain Investment with Paul Veradittakit of Pantera Capital

Ep. 67: Pioneering Blockchain Investment with Paul Veradittakit of Pantera Capital

07/05/18 • 20 min

Only a handful of investment firms were brave enough to enter the crypto space back in the early 2010’s. Those pioneers have witnessed quite an evolution in the blockchain space, and they have gone from being the black sheep of venture capital to enjoying a red-carpet experience with every hedge fund manager on Wall Street.

Paul Veradittakit is a Partner with Pantera Capital, a leading investment firm focused exclusively on projects related to blockchain technology, digital currency and crypto assets. Paul helped launch the firm’s second venture fund, and he sits on the boards of OpenToken and BitOasis. Prior to joining Pantera in 2014, Paul worked at Strive Capital, where he focused on investments in the mobile space.

Today, Paul sits down with us to share his Bitcoin origin story and discuss the evolution of the market since 2014. He offers his take on how the crypto market is changing, explaining why the best talent is coming into the space right now. Listen in as Paul speaks to the tokens that get him up in the morning and addresses the lack of standardization around how entrepreneurs utilize capital.

Topics Covered

How Paul got into the Bitcoin space

Worked for startup in daily deal space
Joined VC in late 2010 (focus on mobile)
Considered working for Coinbase
Ran across Pantera Capital

Paul’s take on the evolution of crypto

20 companies in 2014 (easy to pick winners)
Polychain opened eyes to new sector in 2017
Worldwide adoption of tokens for fundraising

Paul’s insight on the future of the blockchain

Same number of deals, higher quality
Shift in focus to building product
Best talent coming into space

The tokens that get Paul up in the morning

Infrastructure, ways to scale blockchain
Use cases where decentralization enables new markets
Marketplaces where intermediaries take large fees

What surprises Paul about the current market

Companies able to raise capital ‘without legs’
Need for transparency, education (best practices)

Paul’s definition of success

Make world better
Social impact

Connect with Paul

Pantera Capital https://www.panteracapital.com/
Pantera on Facebook https://www.facebook.com/panteracapital/
Pantera on Twitter https://twitter.com/PanteraCapital?lang=en
Paul on LinkedIn https://www.linkedin.com/in/veradittakit/
Paul on Twitter https://twitter.com/veradittakit?lang=en

Resources

App Annie https://www.appannie.com/en/
Adam’s Quora List https://www.quora.com/What-are-the-hottest-Bitcoin-startups-e-g-crypto-currency-startups-such-as-Ripple-also-count
Polychain Capital http://polychain.capital/
Augur https://www.augur.net/
Beam Capital Management https://www.beamcap.com/

Connect with Boost VC

Boost VC Website https://www.boost.vc/
Boost VC on Facebook https://www.facebook.com/boostvc/
Boost VC on Twitter https://twitter.com/BoostVC

Topics Covered

How Paul got into the Bitcoin space

Worked for startup in daily deal space
Joined VC in late 2010 (focus on mobile)
Considered working for Coinbase
Ran across Pantera Capital

Paul’s take on the evolution of crypto

20 companies in 2014 (easy to pick winners)
Polychain opened eyes to new sector in 2017
Worldwide adoption of tokens for fundraising

Paul’s insight on the future of the blockchain

Same number of deals, higher quality
Shift in focus to building product
Best talent coming into space

The tokens that get Paul up in the morning

Infrastructure, ways to scale blockchain
Use cases where decentralization enables new markets
Marketplaces where intermediaries take large fees

What surprises Paul about the current market

Companies able to raise capital ‘without legs’
Need for transparency, education (best practices)

Paul’s definition of success

Make world better
Social impact

Connect with Paul

Pantera Capital https://www.panteracapital.com/
Pantera on Facebook https://www.facebook.com/panteracapital/
Pantera on Twitter https://twitter.com/PanteraCapital?lang=en
Paul on LinkedIn https://www.linkedin.com/in/veradittakit/
Paul on Twitter https://twitter.com/veradittakit?lang=en

Resources

App Annie https://www.appannie.com/en/
Adam’s Quora List https://www.quora.com/What-are-the-hottest-Bitcoin-startups-e-g-crypto-currency-startups-such-as-Ripple-also-count
Polychain Capital http://polychain.capital/
Augur https://www.augur.net/
Beam Capital Management https://www.beamcap.com/

Connect with Boost VC

Boost VC Website https://www.boost.vc/
Boost VC on Facebook https://www.facebook.com/boostvc/
Boost VC on Twitter https://twitter.com/BoostVC

Previous Episode

Ep. 66: Investing in Thunder Lizards to Build Compounding Luck with VC Mike Maples of Floodgate

The startups that become really big, really fast are capitalist mutations or ‘Thunder Lizards’ that force the world to react to their agenda. Their founders refuse to accept the world as is and write their own rules, rather than conforming to the systems in place. This is how VC Mike Maples identifies the entrepreneurs he wants to support, the Prime Movers he can serve as not just an investor but a coconspirator.

Mike is the founding partner at Floodgate, a venture capital fund focused on backing Prime Movers before others believe. Mike has been on the Forbes Midas List since 2010, and his investments include Twitter, Twitch.tv, ngmoco, Weebly, and Lyft, among many others. Prior to his career in VC, Mike founded two successful startups of his own, Tivoli Systems and Motive. He earned his MBA from Harvard Business School.

Today, Mike joins us at Boost to share the concept of the ‘Thunder Lizard,’ and explain why he prefers to work with Prime Movers. He discusses how he got involved with venture capital, who he goes to for advice, and his approach to cultivating humility. Mike offers insight around the time value to decision-making and the idea of progress by way of competing alternatives. Listen in to understand cryptocurrency’s potential to make trust free and get Mike’s advice for aspiring VCs.

Topics Covered

The concept of the ‘Thunder Lizard’

Great startups = capitalist mutation
Force world to react to their agenda

Why Mike prefers to work with Prime Movers

Don’t accept world as is
Serve as coconspirator (vs. investor)

Mike’s path to venture capital

First job as professional calligrapher
Involved in two successful startups
Visit to Sequoia Capital inspired move to Silicon Valley

Who Mike goes to for advice

Father (think big, create value)
David Marquardt, Kevin Compton, Bruce Dunlevie & Mike Moritz

Mike’s approach to decision-making

Two kinds: 51/49 and 70/30
See as product with ship date

Mike’s advice for aspiring VCs

Must find top 10 companies in given year, add value
Put self in places with high probability of getting lucky
Adopt emergent strategy as opposed to deliberate

How Mike cultivates humility

Pass on company that succeeds, take founder to lunch
Seek opportunities not to ‘breathe own fumes’

Mike’s take on the crypto space

Potential to make trust free (vs. expensive intermediary)
Decentralized business creates ‘wealth of the commons’

Mike’s insight on the job of technology

Bring ‘undecideds’ forward
Make case for abundance

The current problem with currencies

Manipulated for political reasons
No ability to exit = no power/voice
‘Forward progress involves choice among competitors’

Connect with Mike

Floodgate http://floodgate.com/
Floodgate on Twitter https://twitter.com/floodgatefund
Mike on Twitter https://twitter.com/m2jr
Mike on LinkedIn https://www.linkedin.com/in/maples

Resources

Mike on The Tim Ferriss Show https://tim.blog/2017/12/16/the-man-who-taught-me-how-to-invest/
Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States by Albert O. Hirschman https://www.amazon.com/Exit-Voice-Loyalty-Responses-Organizations/dp/0674276604

Connect with Boost VC

Boost VC Website https://www.boost.vc/
Boost VC on Facebook https://www.facebook.com/boostvc/
Boost VC on Twitter https://twitter.com/BoostVC

Next Episode

Ep. 68: Using Decentralized Tech to Mobilize Unused Resources with Julian Zawistowski of Golem Network

So many ICOs, so few products on the market. One of the rare startups that has managed to launch a decentralized product is Golem Network.

Golem runs on the same principle as Airbnb, leveraging the sharing economy of decentralized tech to connect many computers in a peer-to-peer network. The same way that Airbnb hosts mobilize their unused resources (i.e.: spare bedrooms) to generate income, Golem users lend out their available computing power, giving software developers the ability to distribute tasks that are too heavy to be computed on a single node. The result is a global, open-source supercomputer powered by the blockchain.

Julian Zawistowski is the Founder and CEO of Golem Factory, the company behind the Golem distributed network. An economist by trade, Julian is fascinated by blockchain technology and the economics of decentralized systems. Prior to his work with Golem, Julian served as a consultant and public policy researcher and that experience frames his understanding of the transformative potential of decentralized technology.

Today, Julian joins us to explain why Golem was the right kind of project for a token sale. He covers the evolution of Golem, from its inception to the current use case in CGI rendering. Julian offers insight around delivering a decentralized product, and we talk scalability—the biggest problem in the token space. Listen in as Julian shares how Golem might expand to include other use cases and learn about the blockchain’s potential to solve for the crisis of trust.

Topics Covered

Julian’s introduction to the crypto space

Background in economics, consulting
Created own software house
One of first projects in blockchain space
Learned about Ethereum in 2014

The idea behind Golem’s decentralized technology

Connect nodes in peer-to-peer network
Distribute tasks too heavy for single node

The current use case for Golem

CGI rendering (animation, 3D scenes)

Julian’s approach to fundraising for Golem

Initially considered venture funding
Shift as token economy emerged

Julian’s take the types of projects that work for tokens

Natural market within product
Strong network effect

What Golem looks like today

Went live in April 2018
30+ team members
Up to 1K users per day

Julian’s insight on delivering a decentralized product

Launch NOW but consider security issues
Tech you depend on defines product

The future of Golem

Move into realm of machine learning, financial analysis

The biggest problems in the token space

Scalability is #1
UX considerations

How the world will change if decentralized systems succeed

Eliminate dependence on institutions for trust
Solve for problems in politics, financial sectors

Connect with Julian

Golem Network https://golem.network/
Golem on Reddit https://www.reddit.com/r/GolemProject/
Golem Blog https://blog.golemproject.net/
Golem on Twitter https://twitter.com/golemproject
Julian on Twitter https://twitter.com/julianzawist?lang=en
Julian on LinkedIn https://www.linkedin.com/in/julian-zawistowski-352478

Resources

SETI@home https://setiathome.berkeley.edu/

Connect with Boost VC

Boost VC Website https://www.boost.vc/
Boost VC on Facebook https://www.facebook.com/boostvc/
Boost VC on Twitter https://twitter.com/BoostVC